A Grantor Charitable Lead Annuity Trust (CLAT) is an irrevocable split-interest trust that provides for a specified amount to be paid to one or more charitable beneficiaries during the term of the trust. The principal remaining in the trust at the end of the term is paid over to, or held in a continuing trust for, a non-charitable beneficiary or beneficiaries identified in the trust. If the terms of a CLAT created during the donor's life satisfy the applicable statutory and regulatory requirements, a gift of the charitable lead annuity interest will qualify for the gift tax charitable deduction under § 2522(c)(2)(B) and/or the estate tax charitable deduction under § 2055(e)(2)(B). In certain cases, the gift of the annuity interest may also qualify for the income tax charitable deduction under § 170(a). The value of the remainder interest is a taxable gift by the donor at the time of the donor's contribution to the trust.
This form is a generic example that may be referred to when preparing such a form for your particular state. It is for illustrative purposes only. Local laws should be consulted to determine any specific requirements for such a form in a particular jurisdiction.
North Dakota Inter Vivos Granter Charitable Lead Annuity Trust (ND IOC LAT) is a type of trust established in North Dakota that involves the donation of assets to a charitable organization while retaining an income stream for a specified period. This type of trust provides the opportunity for individuals to support charitable causes while potentially enjoying certain tax benefits. The ND IOC LAT is governed by North Dakota state laws, and there may be variations within this type of trust structure. Here are a few examples of different types of ND IOC LAT: 1. Charitable Lead Annuity Trust: This type of ND IOC LAT involves the establishment of a fixed annual payment to a charitable organization for a specified duration. The payment is typically determined at the time the trust is funded, and the charitable organization receives the annuity payments during this period. 2. Charitable Lead Unit rust: In this variation of ND IOC LAT, the payment to the charitable organization is calculated as a fixed percentage (typically a percentage of the trust's net asset value) instead of a fixed dollar amount. This allows for fluctuation in the payment amounts based on the trust's performance. 3. Charitable Lead Flip Trust: This type of ND IOC LAT includes a provision that triggers a change in payment recipients after a specified event occurs. For example, the annuity payments may be directed to a charitable organization for a certain period and then switch to non-charitable beneficiaries, such as family members, upon reaching a specific event like the death of the granter. 4. Charitable Lead Net Income Trust: With this variation of ND IOC LAT, the annuity payments are based on the trust's net income. The charitable organization receives distributions equal to the trust's annual net income, ensuring that the payments are aligned with the trust's actual earnings. 5. Charitable Lead Granter Retained Annuity Trust: This type of ND IOC LAT involves the granter retaining an income stream for a specific term before the assets pass to the charitable organization. The retained payments are typically fixed annuity payments, and the remaining assets are eventually transferred to the charitable organization at the end of the trust term. ND IOC Lats offer individuals the opportunity to support charitable causes while enjoying potential tax benefits, such as income tax deductions or reduction in estate taxes. It is essential to consult with an experienced attorney or financial advisor when considering this type of trust, as the specific requirements and tax implications can vary depending on individual circumstances and goals.
